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MANDATE AGREEMENT :
- DUAL LISTING
- CAPITAL INCREASE
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THIS AGREEMENT IS MADE BETWEEN,
1. Bank Brussel ▇▇▇▇▇▇▇ N.V., established under Belgian law, with its
registered office at 1000 ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇, hereinafter referred to
as 'BBL', validly represented by :
...........
2. Dental / Medical Diagnostic Systems, Inc., a Delaware corporation, with its
principal office ▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, hereinafter referred to as 'the Company', validly
represented by ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, Chairman and President;
............
3. Existing shareholders ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, residing at .........
hereinafter referred to as the 'Selling Shareholder',
WHEREAS
(A) The Company, of which the Common Stock and Common Stock Purchase Warrants
are listed on the NASDAQ Small Cap Market under the symbol "DMDS" and
"DMDSW" respectively, wishes to increase its capital through issuance of
2,000,000 shares of Common Stock (the "Shares") to finance the investments
envisaged and to apply for admission to trading of all the shares of Common
Stock of the Company on EASDAQ;
(B) In order to create more liquidity in respect of the Company's shares and in
order to fund future strategic alliances and acquisitions, the parties
hereto have the intention to initiate a combined public offering of the
Shares, the exact number of which shall be determined by mutual agreement
between the Company, the Selling Shareholder and BBL, and the subsequent
admission to trading of those Shares on EASDAQ (the "Transaction");
(C) The parties hereto wish to retain BBL as Lead Manager for the Transaction;
NOW THEREFORE IT IS HEREBY AGREED AS FOLLOWS,
ARTICLE 1 - SUBJECT
The Company desires to issue 2,000,000 Shares, $ .01 par value, (the "Offered
Shares") of the Company.
The Company and the Selling Shareholder hereby agree to appoint BBL as Lead
Manager in connection with the Transaction.
The number of Offered Shares to be issued by the Company and to be sold by each
Selling Shareholder shall be determined by mutual agreement between the Company,
the Selling Shareholder and BBL.
ARTICLE 2 - DESCRIPTION OF THE TASKS OF BBL
2.1. IN GENERAL
BBL will act as Lead Manager of the Transaction. It will compose an
international underwriting and selling consortium (the institutions which will
constitute such consortium are hereafter referred to as the "Managers").
BBL may delegate with the Company's approval certain tasks to affiliated
companies (such as ING-Barings and ▇▇▇▇▇▇▇▇▇-▇▇▇▇▇▇▇▇▇).
2.2. STRUCTURING OF THE TRANSACTION
BBL solely will act as Lead Manager. The tasks of the Lead Manager shall include
the following, without limitation :
- analyse the business plan, the financial figures and the backlog orders of
the Company;
- provide for equity research and research reports;
- advise the Company of the technical modalities of the Transaction;
- advise the Company as to geographical markets to envisage;
- advise the Company with regard to the timing of the Transaction;
- assist and coordinate in collaboration with BBL counsel the supplementation
and translation of the prospectus, to the extent required by Belgian law,
on the basis of information to be supplied by the Company;
- assist in the drawing up of prospectus, summaries (and translations
thereof);
- assist in the negotiations with all supervisory authorities and assist the
Company and the Selling Shareholder in obtaining the requisite approvals
for the Transaction, including, but not limited to, the filing to be
prepared in accordance with applicable laws and regulations, in
consultation with the Company's legal advisors;
- assist the Company in respect of communications with the press and the
preparation of the road-shows and to the coordination of the marketing of
the Transaction;
- advise the Company as to which external advisers to use, e.g. in connection
with the financial public relations and with regard to legal counsel;
- assist the Company, together with the external legal counsel, in respect of
the legal aspects of the Transaction,
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- assist with the printing and distribution of the prospectus;
- determine, in agreement with the Company, the period during which the
Offered Shares will be offered (the 'Offering Period');
- act as bookrunner with regard to the Combined Offering and allocate the
Offered Shares;
- determine, by mutual agreement with the Company, the possible discount, if
any, at which the Offered Shares are to be offered, as well as the fixed
price at which they are finally to be sold;
- coordinate the activities of the members of the consortium;
- structure the Transaction in consultation with the legal advisors of the
Company;
- advise the Company and the Selling Shareholder in respect of the size of
the Transaction, the number of Shares to be offered and the pricing and
placement method for the Offered Shares;
- consult with the Company and the Selling Shareholder regarding any
reduction of demand and allocation of Offered Shares, in accordance with
the recommendations of the Belgian Commission for Banking and Finance;
- centralize the orders and payments of the other members of the consortium
and other financial institutions;
- organize internal marketing actions within the BBL network.
2.3. WITH REGARD TO THE TRANSACTION
- centralise the payments;
- perform the services of a financial intermediary;
- perform the financial service in connection with the Shares.
2.4. MARKET MAKING
BBL/▇▇▇▇▇▇▇▇▇ Raemdonck will act as market maker in connection with the Shares
listed on EASDAQ in accordance with the provisions of the EASDAQ Rule Book.
In connection with such market making, BBL/▇▇▇▇▇▇▇▇▇ Raemdonck shall (during a
period of two years after the admission to trading of the Offered Shares) inform
the shareholders in an active manner and provide sufficient financial
information regarding the Company by, inter alia, publishing additional
follow-up equity research reports, without any additional fees being due for the
performance of such services.
ARTICLE 3 - CONDITIONS
The obligations of BBL to affect the Transaction under this agreement (the
'Agreement') is subject to the following conditions :
a) There will not occur any political, military, financial, economical,
monetary or social events nor any change in the taxation or exchange rates
or controls in Belgium nor in other countries which, in the reasonable
opinion of BBL, is expected to have a material adverse effect on the
Transaction;
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b) The average of the EASDAQ index does not fall below a level which is 10 %
below the highest level reached by this average as from the signing of this
Agreement, to the extent, however, that in the opinion of BBL this would be
likely to prejudice the success of the Transaction or dealings in the
Shares in the secondary market;
c) The Company and the Selling Shareholder will not fail to use their
commercially reasonable efforts to cooperate with respect to timely
furnishing of information nor to observe any legal and administrative
requirements with respect to the Transaction;
d) The Company shall have filed a registration statement for the Offered
Shares with the US Securities and Exchange Commission (the "SEC") and such
registration statement shall have been declared effective by the SEC;
e) The due diligence conducted by TROOP, STEUBER, PASICH, ▇▇▇▇▇▇▇ &TOBEY LLP
("TSPR&T") will not reveal any element which, in the reasonable opinion of
BBL, would have a material adverse effect on the Transaction;
f) Trading generally on EASDAQ shall not have been suspended for two
consecutive days, nor shall maximum ranges for prices for securities have
been set, or minimum or maximum prices for trading have been fixed by said
exchange;
g) The prospectus shall have been approved by the Commission for Banking and
Finance and the EASDAQ Market Authority shall have admitted the Shares to
trading on EASDAQ.
h) The Company, the Selling Shareholder and the Managers shall have agreed on
and entered into an underwriting agreement under the conditions set out in
Article 5 of this Agreement and in form and substance customary for
international public offerings.
If any of the conditions hereinabove provided for shall occur or, as the
case may be, shall not have been fulfilled when and as required by the
respective provisions, the obligations of BBL under this Agreement may be
terminated by either BBL or the Company by notifying the other party and
the Selling Shareholder of such termination in writing, by letter of by fax
at or prior to the last day of the Offer Period (the 'Closing Date'). In
such event, the Selling Shareholder, the Company and the Managers shall not
have any further obligation under this Agreement (except to the extent
provided in Sections 7 and 8 hereof).
ARTICLE 4 - GENERAL STRUCTURE OF THE OFFER
4.1. COMBINED OFFERING
The Combined Offering will consist of a public offering in Belgium and a private
offering in and outside Belgium (excluding the United States, Japan and Canada),
which will take place simultaneously. The allocation of Offered Shares will be
determined by BBL in concertation with the Company according to set criteria to
be agreed upon.
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4.2. GREEN SHOE
The Company and/or the Selling Shareholder, as the case may be, shall grant BBL
an option to purchase up to 200,000 shares of common stock (the "Greenshoe
Shares") to cover any over-allotments, exercisable within 30 days from the first
date of trading on EASDAQ. The proportional share of the Company and the Selling
Shareholder in the Greenshoe Shares (if the option is exercised) shall be
determined amongst them, at their discretion. In the event that the Company,
upon exercise of the option, delivers all the Greenshoe Shares, the Selling
Shareholder shall no longer be a party to this Agreement and all references in
this Agreement to the "Selling Shareholder" shall be deleted.
ARTICLE 5 - UNDERWRITING
An underwriting agreement will be entered into between the Managers, the Company
and the Selling Shareholder on the date of closing of the Offering Period, which
will be governed by Belgian law and will be subject to the following conditions:
a) There will not occur any political, military, financial, economical,
monetary or social event in Belgium nor in other countries which, in the
reasonable opinion of BBL, is expected to have a material adverse effect on
the Transaction;
b) The underwriting agreement shall contain (i) representations and warranties
of the Company and the Selling Shareholder effective as of the date of the
underwriting agreement substantially in the form as set out in Annex I,
(ii) undertakings and obligations of the Company and Selling Shareholder
substantially in the form as set out in Annex II and (iii) the
indemnification provisions substantially in the form as set out in Annex
III.
c) BBL, as representative of the Managers, shall have received on the Closing
Date the opinion for the Company and the Selling Shareholder, dated as of
the Closing Date, substantially covering the matters listed in Annex IV
hereto;
d) At the time of execution of the underwriting agreement, BBL, as
representative of the Managers, shall have received from _____________,
auditors to the Company, a letter dated such date , in form and substance
satisfactory to the Managers, containing statements and information of the
type ordinarily included in accountants' "comfort letters" to managers with
respect to the financial statements and certain financial information
contained in the Registration Statement and Prospectus. At the time of
Closing __________, auditors shall furnish a letter, dated not more than
three business days prior to Closing, reaffirming the statements of the
letter mentioned above in this paragraph;
e) The notification in respect of article 26 of the Royal Decree nDEG. 185 of
July 9, 1935 and all amendments thereto shall have become effective and any
request of the Banking and Finance Commission for additional information
(to be included in the notification, the Prospectus or otherwise) shall
have been disclosed to the Managers and complied with to its and their
satisfaction. No stop order suspending the effectiveness of the
notification or the Prospectus shall have been issued and no proceedings
for that purpose shall have been taken or threatened by the Banking and
Finance Commission or, to the knowledge of the Company, shall be
contemplated by the Banking and Finance Commission and no injunction,
restraining order, or order of any nature by a
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court shall have been issued nor shall proceedings in respect thereof be
pending or threatened as of the Closing Date which would prevent the sale
or the issuance of the Offered Shares;
e) The Shares shall be admitted to trading on EASDAQ, subject only to BBL
being satisfied that they will be listed or admitted to trading not later
than three days after the Closing Date;
f) The registration statement pertaining to the Transaction shall have been
declared effective by the U.S. Securities and Exchange Commission.
ARTICLE 6 - FEES
The Company and the Selling Shareholder agree to pay severally and not jointly,
pro-rata based on their respective portions of the proceeds from the
Transaction, to BBL the following fees, to be increased with VAT (if
applicable):
6.1 MANAGEMENT FEE
For the services rendered as Lead Manager in preparation of and during the
Transaction, BBL will receive a fee of 1,4 % of the Price per share multiplied
by the amount of Offered Shares (excluding Greenshoe Shares).
This remuneration will also be due if the Transaction is cancelled as a result
of a disposal in any way of a division or part of the Company before the
termination date of this Agreement referred to in article 12 and will be
calculated on the countervalue or economical value of the transaction which the
Company and/or the case may be the Selling Shareholder receive or benefit.
6.2. UNDERWRITING FEE
For the underwriting commitment, BBL as representative of the Managers, will
receive a fee of 1,4 % of the Price per share multiplied by the amount of
Offered Shares (excluding Greenshoe Shares).
6.3. Selling fee
For the selling services BBL, as representative of the Managers, will receive a
fee of 4,2 % of the Price per share multiplied by the aggregate amount of the
Offered Shares and the shares of the Greenshoe.
6.4. DIVISION OF FEES
The fees may be divided between the Managers in such proportions as BBL may
determine. The Company shall not be concerned with and have no liability with
regard to the arrangements between BBL and the Managers.
ARTICLE 7 - TAXES, COSTS AND EXPENSES
Except as otherwise provided the Company will pay the out-of-pocket costs and
expenses and fees in relation to this Agreement, which are substantially the
following (the "Out-of-Pocket Expenses") : accounting fees, the fees and
disbursements of any counsel for the Company (such as without limitation legal,
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fiscal, public relations), patent attorney, notary public, advertising,
logistics, the cost of printing and delivering to, or as requested by, the
Managers of copies of the Prospectus and any previous drafts thereof and final
versions thereof, the translation costs for the Prospectus summary and final
versions thereof, the filing fees of the Banking and Finance Commission; the
filing fees and expenses incident to the EASDAQ trading, the costs for the
issuance of the global certificate(s), the fees for the deposit of these with
Euroclear and the expenses in connection with the roadshows.
To the extent, if at all, that the Selling Shareholder or any of the Managers
engage special legal counsel to represent them in connection with this Combined
Offering, the fees and expenses of such counsel shall be borne by the Selling
Shareholder or such Manager.
Any taxes, stamp duties or registration fees imposed on the initial sale or the
issue of the Offered Shares to the several Managers will be paid by the Company
and the Selling Shareholder.
If the Transaction is not consummated because the Company or BBL decides not to
proceed with the offering for any reason as permitted under this Agreement
(including under articles 3 and 13) other than a material breach by BBL of its
obligations (in which case no amount shall be due to BBL), or because BBL
decides not to proceed with the Transaction as a result of a material breach by
the Company of its representations, warranties or covenants in this Agreement or
as a result of any failure, refusal or inability on the part of the Company to
perform any undertaking or satisfy any condition of this Agreement or to comply
with any of the terms hereof on their part to be performed, then, as the BBL's
sole and exclusive remedy, the Company will be obligated to reimburse BBL for
its accountable Out-of-Pocket Expenses up to the sum of $ 100,000 (US). In no
event, will BBL, in the event this Agreement is terminated, be entitled to
receive more than an amount equal to its actual accountable Out-of-Pocket
Expenses.
ARTICLE 8 - PAYMENTS
8.1. The payment of the management fee, the underwriting and selling fee
referred to in 6.2., 6.3. and 6.4. will be due on a day to be
determined in the Underwriting agreement to be entered into.
8.2. The payment of the remuneration referred to in the second paragraph of
6.1. will be due at the closing of the Transaction described therein.
ARTICLE 9 - NOTICES
All communications hereunder shall be in writing and may be mailed, delivered,
telecopied or telegraphed as follows :
To BBL To The company and the Selling
Att. ▇▇▇ ▇▇▇▇▇▇▇ Shareholder
Att. Dental / Medical Diagnostic
Systems Inc.
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ARTICLE 10 - WAIVER
BBL may in its discretion and on such terms as it thinks fit, waive or extend
time for compliance with all or any part of the conditions set out or referred
to in this Agreement.
ARTICLE 11 - RESPONSIBILITY
BBL shall execute the tasks hereunder with the skill and care appropriate to a
prudent professional with respect to the Transaction.
The contractual obligations provided for in this Agreement, save for the
underwriting obligations referred to in Article 5, are to be fulfilled on a best
effort basis without guaranteeing any result
BBL will only bear responsibility for the direct damages as a result of gross
negligence, wilful misconduct or fraud. BBL will bear no responsibility
whatsoever for any faults, errors or failure to perform by third parties who
participated in preparation of the Transaction, except if such third parties are
engaged by BBL without the agreement of the Company and the Selling Shareholder.
ARTICLE 12 - TERMINATION
This Agreement is entered into for a definite period of time and will
automatically expire at the earlier of December 1999 or the date on which all
the Offered Shares and Greenshoe Shares, as the case may, are paid for by the
Managers.
Notwithstanding the foregoing paragraph, termination of this Agreement will not
affect accrued rights, existing commitments and any contractual provisions
intended to survive termination, including articles 6, 7, 11, 12 and 15 of this
Agreement.
ARTICLE 13 - REVOCATION
The Company may terminate this Agreement at any time with immediate effect and
without the need for judicial authorization, but without prejudice to its
obligation to pay the Out-of-Pocket Expenses as set out in the last paragraph of
article 7, in the event the price at which the Offered Shares will be
effectively offered falls below USD 7.00 as quoted on the NASDAQ Small Cap
Market. In no event will BBL, in the event this Agreement is terminated in
accordance with this Article, be entitled to receive more than an amount equal
to its actual accountable Out-of-Pocket Expenses.
ARTICLE 14 - SUCCESSORS
This Agreement has been and is made solely for the benefit of BBL, the Company
and the Selling Shareholder and their respective successors, executors,
administrators, heirs and assigns, and the officers and directors and persons
referred to herein, and no other person will have any right or obligation
hereunder. No purchaser of any of the Offered Shares from any Managers shall be
deemed a successor or assign merely because of such purchase.
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ARTICLE 15 - CONFIDENTIALITY AND CONFLICTS
15.1 It is understood that no press releases or other publicity relating to
the Transaction will be issued without the prior written agreement of
the Company, the Selling Shareholder and BBL, and that no material
relating to the Transaction will be distributed without the prior
written agreement of the Company, the Selling Shareholder and BBL,
except as may be required by law, the rules of respectively the Nasdaq
Small Cap Market and Easdaq or as ordered by a competent authority or
court of law. Except for disclosures permitted by the previous
sentence, the Company, the Selling Shareholder and BBL agree to keep
the Transaction strictly confidential and not to make any announcement
of the Transaction until the launch of the pre-marketing campaign with
targeted institutional investors.
15.2 BBL recognizes that information received by it during the course of
its engagement is of a confidential nature and unless otherwise agreed
by the Company and the Selling Shareholder neither BBL nor the
Managers shall use such confidential information for any purpose other
than the Transaction or disclose any such information to any third
party, provided always that the Managers may be bound by law to
disclose such confidential information to the competent Market
Authorities or regulatory agencies.
The Managers shall be allowed to disclose such confidential
information if needed for the purpose of defending any claim or action
against it in respect to the Transaction. The Managers will promptly
notify in advance the Company and the Selling Shareholder of any such
disclosure of information or production of documents. The Managers
will, where reasonably practicable, seek to impose a confidentiality
requirement on the recipient in any case where the information is not
subject to statutory restrictions on disclosure.
ARTICLE 16 - SUBMISSION TO JURISDICTION
This Agreement and any discussions in relation hereto shall be governed and
resolved in accordance with Belgian law. The competent Courts of Brussels will
have the exclusive jurisdiction and every party hereto hereby accepts the
competence of said courts.
ARTICLE 17 - SEVERABILITY
The invalidity or unenforceability of any one stipulation or clause of the
present Agreement shall not result in the invalidity or the unenforceability of
any other provision of the Agreement or of the Agreement as a whole. In the
event that the validity or the enforceability of this Agreement or any provision
thereof is challenged the parties hereto undertake to do whatever is reasonably
necessary or advisable to maintain such provision and this Agreement in full
force and effect or to substitute such provisions by other provisions that have
economically substantially the same effect for all parties hereto.
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Brussels, April 15, 1999 made in 3 originals each party hereto declaring to have
received one original.
The Company The Selling Shareholder
/s/ /s/
Bank Brussels ▇▇▇▇▇▇▇
/s/
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ANNEX I
REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND THE SELLING SHAREHOLDER
For the purpose of these representations and warranties, "Material Adverse
Effect" means a material adverse change occurred with respect to the business
operations, assets, properties, financial condition or results of operations of
the Company and its subsidiaries taken as a whole.
BY THE COMPANY :
(a) The Company has prepared in consultation with BBL the filing with the
competent authorities of (i) a request for admission to trading of all
Shares on EASDAQ, (ii) a notification pursuant to article 26 of the Royal
Decree nDEG. 185 of July 9, 1935 and (iii) a prospectus relating to the
public offering in Belgium of the Offered Shares.
(b) The Prospectus, as of the Closing Date, does not include any untrue
statement of a material fact or omit to state any material fact as required
to be stated therein or necessary to make the statements therein not
misleading, provided that this representation and warranty does not cover
any information furnished by BBL;
(c) The Company has been duly organized and is validly existing as a
corporation in good standing (good standing meaning for the purposes of
this Agreement that the Company has filed all documents required to
maintain its corporate existence) under the corporate laws of Delaware,
with corporate power and authority to own or lease its properties and
conduct its business as carried on by it and as described in the
Prospectus. The Company is duly qualified to transact business as a
foreign corporation in good standing in all jurisdictions in which the
conduct of its business as currently conducted requires such qualification
(except for any jurisdictions where the failure to be so qualified or in
good standing would not have a material adverse effect on the shareholders'
equity, the condition (financial or otherwise), the business, management,
properties, assets, rights or operations of the Company and its
subsidiaries, taken as one enterprise);
(d) The Company had, at the respective dates indicated in the Prospectus, the
duly authorized and outstanding Shares set forth therein; the terms of the
Shares do, and at the Closing Date the terms of the Shares will, conform in
all material respects to the description thereof contained in the
Prospectus, and, except as disclosed in the Prospectus, there are no
outstanding securities convertible into or exchangeable for, or warrants,
rights or options to purchase from the Company, or obligations of the
Company to issue Shares;
(e) All of the outstanding Shares of the Company have been duly authorized and
validly issued, are fully paid and non-assessable ('non-assessable' shall
mean for the purposes of this Agreement that a shareholder is not required
to pay more to the Company than his original investment); on the Closing
Date, the Company's Shares will have been duly authorized and validly
issued, fully paid and non assessable and there are no pre-emptive or other
rights to subscribe to the Shares in favor of the shareholders;
(f) All of the outstanding Shares of each subsidiary of the Company have been
duly and validly authorized and issued and are fully paid and non
assessable;
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(g) The Company owns directly or indirectly that percentage of the issued and
outstanding shares of its subsidiaries set forth in the Prospectus as being
owned by the Company free and clear of any security interest, pledge, lien
or encumbrance;
(h) Each subsidiary of the Company is a company duly incorporated and validly
existing under the laws of the jurisdiction of its incorporation, is not in
liquidation or receivership and has the requisite corporate power and
authority to own its properties and conduct its business as described in
the Prospectus; each subsidiary of the Company is duly qualified to do
business as a foreign corporation in good standing in those jurisdictions
where the conduct of its business as currently conducted requires such
qualification (except in such jurisdictions where the failure to be so
qualified or in good standing would not have a material adverse effect on
the shareholders' equity, the condition (financial or otherwise), the
business, management, properties, assets, rights or operations of the
Company and its subsidiaries, taken as one enterprise);
(i) This Agreement and the performance by the Company of its obligations
thereunder, have been duly and validly authorized. This Agreement has been
duly and validly executed and delivered by the Company, and constitutes the
valid and legally binding agreement of the Company, enforceable against the
Company in accordance with its terms, provided, however, that the
enforceability of the Company's obligations may be limited by bankruptcy,
fraudulent conveyance, insolvency, reorganization, moratorium, and other
laws relating to or affecting creditor's rights generally and by general
equitable principles;
(j) The Company is not in violation of or in default under its Certificate of
Incorporation and by-laws (the 'Corporate Documents') or, except as
disclosed in the Prospectus, under any material agreement, lease, license,
permits contract, indenture or other instrument or obligation to which it
is a party or by which it, or any of its properties, is bound other than
defaults which, individually or in the aggregate, would not have any impact
whatsoever on the validity of the issuance by it of the Offered Shares or
would not have a material adverse effect on the shareholders' equity, the
condition (financial or otherwise), the business, management, properties,
assets, rights or operations of the Company and its subsidiaries, taken as
one enterprise; The execution and delivery of this Agreement and the
consummation of the transactions herein contemplated and the fulfilment of
the terms hereof will not conflict with or result in a breach of any of the
terms or provisions of , or constitute a default under, any law or
applicable regulation, any indenture, mortgage, deed of trust or other
agreement or instrument to which the Company is a party, or of the
Corporate Documents or any order, rule or regulation applicable to the
Company of any court or of any regulatory body or administrative agency or
other governmental body having jurisdiction over the Company other than
defaults which individually or in the aggregate, would not have any
material adverse effect on the shareholders' equity, the condition
(financial or otherwise), the business, management, properties, assets,
rights or operations of the Company and its subsidiaries, taken as one
enterprise);
(k) The Company holds all material licenses, certificates and permits from
governmental authorities, required to use all trademarks, trade secrets or
other intellectual property rights which are necessary to the conduct of
its business as it is presently being conducted; and the Company has to the
best of its knowledge not violated or infringed, or, except as set forth in
the Prospectus, received any notice of violation or infringement or
conflict with asserted rights of others with
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respect to any patents, patent rights, trade names, trademarks or
copyrights, which, if proven, would have a Material Adverse Effect;
(l) The Company knows of no material infringement by others of patents, patent
rights, trade names, trademarks or copyrights owned by or licensed to the
Company except as disclosed in the Prospectus;
(m) The Company has not violated any applicable law or regulation relating to
the protection of human health and safety, the environment or hazardous or
toxic substances or wastes, pollutants or contaminants ("Environmental
Laws") other than defaults which, individually or in the aggregate would
not have a material adverse effect on the shareholders' equity, the
condition (financial or otherwise), the business, management, properties,
assets, rights or operations of the Company and its subsidiaries, taken as
one enterprise; and has all material permits, licenses franchises and
authorizations of governmental or regulatory authorities, under any
applicable Environmental Laws, as are necessary to own, lease and operate
its respective properties and to conduct its business in the manner
described in the Prospectus, except where the absence of such permit would
not have a material adverse effect;
(n) The Company maintains a system of internal accounting controls sufficient
to provide reasonable assurances that (i) transactions are executed in
accordance with management's general or specific authorization; (ii)
transactions are recorded as necessary to permit preparation of financial
statements in conformity with U.S GAAP accounting principles and to
maintain accountability for assets; (iii) access to assets is permitted
only in accordance with management's general or specific authorization; and
(iv) the recorded accountability for assets is compared with existing
assets at reasonable intervals and appropriate action is taken with respect
to any differences;
(o) To the best of its knowledge the Company is of the opinion that it carries,
or is covered by, insurance in such amounts and covering such risks as is
reasonably adequate for the conduct of its business as it is presently
being conducted and the value of its properties or as is customary for
companies engaged in similar industries;
(p) Other than as described in the Prospectus no stamp or other issuance or
transfer taxes or duties and no capital gains, income, withholding or other
taxes are payable by or on behalf of the Managers to the Kingdom of Belgium
or to any political subdivision or taxing authority thereof or therein in
connection with the sale and delivery by the Managers of the Shares to the
initial purchasers thereof;
(q) No material labour problem exists with its employees or, to the Company's
knowledge is imminent that could materially adversely affect the Company,
and the Company is not aware of any existing or imminent labour disturbance
by the employees of the Company or any of its subsidiaries and has not been
notified of any existing material labour problems with any of its principal
suppliers, contractors or customers that could reasonably be expected to
result in a material adverse change in the earnings, business, management,
properties, assets, rights, operations or condition (financial or
otherwise) of the Company;
(r) Except as described in the Prospectus, there are no legal or governmental
proceedings pending to which the Company or any of its subsidiaries is a
party or of which any property of the Company or any of its subsidiaries is
the subject which, if determined adversely to the Company or such
subsidiary, could
13
reasonably be expected individually or in the aggregate to have a material
adverse effect on the shareholders' equity, the condition (financial or
otherwise), the business, management, properties, assets, rights,
operations or condition (financial or otherwise) of the Company and its
subsidiaries, taken as one enterprise; and other than as set forth in the
Prospectus, the Company and its subsidiaries, have not received any
notifications which indicate that such proceedings are threatened by
governmental authorities or threatened by others;
(s) The Prospectus contains consolidated financial statements of the Company,
prepared in accordance with US generally accepted accounting standards.
The respective accounting standards were consistently applied and present
fairly the position of the Company as of the dates, and the results of
operations and cash flows of the Company for the periods indicated in the
Prospectus and (i) except as disclosed in the Prospectus, there has been no
material adverse change, nor any development or event that is likely to
result in a prospective material adverse change in the condition (financial
or otherwise), business, management, properties, assets, rights, results of
operations or shareholders' equity of the Company and its subsidiaries
taken as one enterprise, and (ii) there has been no distribution of any
kind declared, paid or made by the Company on its Shares;
(t) There is at present no material discussion with any competent tax authority
in relation to the contents of any tax declaration made by the Company or
any of its subsidiaries, which individually or in the aggregate would have
a material adverse effect on the shareholders' equity, the condition
(financial or otherwise), the business, management, properties, assets,
rights, operations or condition (financial or otherwise) of the Company and
its subsidiaries, taken as one enterprise;
(u) There is at present no material discussion with any social security
authority in relation to the contents of any declaration made by the
Company or any of its subsidiaries, which individually or in the aggregate
would have a material adverse effect on the shareholders' equity, the
condition (financial or otherwise), the business, management, properties,
assets, rights or operations of the Company and its subsidiaries, taken as
one enterprise.
BY THE SELLING SHAREHOLDER :
The Selling Shareholder represents and warrants to each of the Managers as
follows:
(a) The Selling Shareholder is the lawful owner of, and has and at the Closing
Date will have exclusive title to, the Common Stock represented by the
Shares to be sold by the Selling Shareholder pursuant to this Agreement,
free and clear of any liens, encumbrances, equities and claims, and the
Selling Shareholder has full right, power and authority to effect the sale
and delivery of such Shares; and upon the delivery of, the Shares pursuant
to this Agreement, the BBL as representative of the managers will acquire
exclusive title thereto, free and clear of any liens, encumbrances,
equities and claims;
(b) The Selling Shareholder has full right power and authority to execute and
deliver this Agreement, and to perform its obligations under such agreement
and such agreement constitute valid and legally binding agreements of the
Selling Shareholder enforceable in accordance with their respective terms.
The execution and delivery of this Agreement and of the sale to BBL as
14
representative of the Managers of the Shareholder's Shares transactions
herein contemplated and the fulfilment by the Selling Shareholder of the
terms in respect hereof will not require any consent, approval,
authorization, or other order of any court, regulatory body, administrative
agency or other governmental body and will not result in a breach of any of
the terms and provisions of, or constitute a default under, the
organizational documents of the Selling Shareholder, if not an individual,
or any indenture, mortgage, deed of trust or other agreement or instrument
to which the Selling Shareholder of any court or of any regulatory body or
administrative agency or other governmental body having jurisdiction over
the Selling Shareholder or its assets;
(c) The information in the Prospectus which specifically relates to the Selling
Shareholder, is a summary complete and accurate in all material respects
and does not as of the date of the Prospectus and on the Closing Date,
contains any untrue statement of a material fact or omit to state any
material fact necessary to make the statements therein not misleading.
15
ANNEX II
COVENANTS OF THE COMPANY AND THE SELLING SHAREHOLDER
COVENANTS OF THE COMPANY
The company covenants and agrees with the several Managers that:
(a) The Company shall respect the 'Continuing Obligations' as described in
Chapter IV of the EASDAQ rules as may be amended from time to time.
Furthermore the Company will, for a period of five years from the Closing
Date, deliver to the Managers copies of annual reports and copies of all
other documents, reports and information furnished by the Company to its
stockholders or filed with EASDAQ or any other securities exchange where
the Shares of the Company are listed pursuant to the requirements of such
exchange;
(b) Except as provided for in the Certificate of Incorporation the Company will
not take, directly or indirectly, any action designed to cause or result
in, or that has constituted or might reasonably be expected to constitute,
the manipulation of the price of any securities of the Company.
COVENANTS OF THE SELLING SHAREHOLDER
The Selling Shareholder covenants and agrees with the several Managers that:
(a) The Selling Shareholder will comply with the restrictions provided in the
articles of association of the Company;
(b) The Selling Shareholder will not take, directly or indirectly, any action
designed to cause or result in, or that might reasonably be expected to
constitute, the manipulation of the price of any securities of the Company.
16
ANNEX III
INDEMNIFICATION PROVISIONS
(a) The Company will indemnify and hold harmless each Manager against any
losses, claims, damages or liabilities, joint or several, to which such Manager
may become subject, under the Securities Act of 1933 (the "Act") or otherwise,
insofar as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon any untrue statement or alleged untrue
statement of any material fact contained in any Registration Statement, the
Prospectus, or any amendment or supplement thereto, or any related preliminary
prospectus, or arise out of or are based upon the omission or alleged omission
to state therein a material fact required to be stated therein or necessary to
make the statements therein not misleading, and will reimburse each Manager for
any legal or other expenses reasonably incurred by such Manager in connection
with investigating or defending any such loss, claim, damage, liability or
action as such expenses are incurred; provided however, that the Company will
not be liable in any such case to the extent that any such loss, claim, damage
or liability arises out of or is based upon an untrue statement or alleged
untrue statement in or omission or alleged omission from any such documents in
reliance upon and in conformity with written information furnished to the
Company by any Manager through BBL expressly for the use therein.
(b) The Selling Shareholder will indemnify and hold harmless each Manager
against any losses, claims, damages or liabilities, joint or several, to which
such Manager may become subject, under the Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon any untrue statement or alleged untrue statement of any
material fact concerning the Selling Shareholder contained in any Registration
Statement, the Prospectus, or any amendment or supplement thereto, or any
related preliminary prospectus, or arise out of or are based upon the omission
or alleged omission to state therein a material fact concerning the Selling
Shareholder required to be stated therein or necessary to make the statements
therein not misleading, and will reimburse each Manager for any legal or other
expenses reasonably incurred by such Manager in connection with investigating or
defending any such loss, claim, damage, liability or action as such expenses are
incurred; provided, however, that the Selling Shareholder will not be liable in
any such case to the extent that any such loss, claim, damage or liability
arises out of or is based upon an untrue statement or alleged untrue statement
in or omission or alleged omission from any of such documents in reliance upon
and in conformity with written information furnished to the Company by any
Manager through BBL specifically for use therein. Notwithstanding the foregoing,
the Selling Shareholder's indemnity of the Manager will be limited to that
amount of proceeds received by the Selling Shareholder from the Transaction.
(c) Each Manager will severally and not jointly indemnify and hold
harmless the Company and the Selling Shareholder against any losses, claims,
damages or liabilities to which the Company or the Selling Shareholder may
become subject, under the Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are based
upon any untrue statement or alleged untrue statement of any material fact
contained in any Registration Statement, the Prospectus, or any amendment or
supplement thereto, or any related preliminary prospectus, or arise out of or
are based upon the omission or the alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements therein
not misleading, in each case to the extent,
17
but only to the extent, that such untrue statement or alleged untrue statement
or omission or alleged omission was made in reliance upon and in conformity with
written information furnished to the Company by such Manager through BBL
specifically for use therein, and will reimburse any legal or other expenses
reasonably incurred by the Company and the Selling Shareholder in connection
with investigating or defending any such loss, claim, damage, liability or
action as such expenses are incurred. Notwithstanding the foregoing, each
Manager's indemnity of the Company and the Selling Shareholder will be limited
to 100% of the fees payable to each such Manager with respect to the
Transaction.
(d) Promptly after receipt by an indemnified party under this Section
of notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against an indemnifying party under
subsection (a), (b) or (c) above, notify the indemnifying party of the
commencement thereof; but the omission so to notify the indemnifying party will
not relieve it from any liability which it may have to any indemnified party
otherwise than under subsection (a), (b) or (c) above. In case any such action
is brought against any indemnified party and it notifies an indemnifying party
of the commencement thereof, the indemnifying party will be entitled to
participate therein and, to the extent that it may wish, jointly with any other
indemnifying party similarly notified, to assume the defense thereof, with
counsel satisfactory to such indemnified party (who shall not, expect with the
consent of the indemnified party, be counsel to the indemnifying party), and
after notice from the indemnifying party to such indemnified party of its
election so to assume the defense thereof, the indemnifying party will not be
liable to such indemnified party under this Section for any legal or other
expenses subsequently incurred by such indemnified party in connection with the
defense thereof other than reasonable costs of investigation; PROVIDED, HOWEVER,
that (i) if the indemnified party or parties reasonably determine that there may
be a conflict between the positions of the indemnifying party or parties and of
the indemnified party or parties in conducting the defense of such action, suit,
investigation, inquiry or proceeding or that there may be legal defenses
available to such indemnified party or parties different from or in addition to
those available to the indemnifying party or parties, then separate counsel
chosen by the indemnified party or parties shall be entitled to conduct the
defense to the extent reasonably determined by such counsel to be necessary to
protect the interests of the indemnified party or parties and (ii) in any event,
the indemnified party or parties shall be entitled to have counsel chosen by
such indemnified party or parties to participate in, but not conduct, the
defense, however, in no event shall the indemnifying parties be obligated to pay
for more than one firm of attorneys and one local counsel in each appropriate
jurisdiction for all of the indemnified parties. No indemnifying party shall,
without the prior written consent of the indemnified party, effect any
settlement of any pending or threatened action in respect of which any
indemnified party is or could have been a party and indemnity could have been
sought hereunder by such indemnified party unless such settlement includes an
unconditional release of such indemnified party from all liability on any claims
that are the subject matter of such action. Notwithstanding the foregoing, each
Manager's indemnity of the Company and the Selling Shareholder will be limited
to 100% of the fees payable to each such Manager with respect to the
Transaction.
(e) The indemnification provided for in this Section is unavailable or
insufficient to hold harmless an indemnified party under subsection (a), (b) or
(c) above, then each indemnifying party shall contribute to the amount paid or
payable by such indemnified party as a result of the losses, claims, damages or
liabilities referred to in subsection (a), (b) or (c) above (i) in such
proportion as is appropriate to reflect the relative benefits received by the
Company and the Selling Shareholder
18
on the one hand and the Managers on the other from the offering of the Shares or
(ii) if the allocation provided by clause (i) above is not permitted by
applicable law, in such proportion as is appropriate to reflect not only the
relative benefits referred to in clause (i) above but also the relative fault of
the Company and the Selling Shareholder on the one hand and the Managers on the
other in connection with the statements or omissions which resulted in such
losses, claims, damages or liabilities as well as any other relevant equitable
considerations. The relative benefits received by the Company and the Selling
Shareholder on the one hand and the Managers on the other shall be deemed to be
in the same proportion as the total net proceeds from the offering (before
deducting expenses) received by the Company and the Selling Shareholder bear to
the total underwriting fees received by the Managers. The relative fault shall
be determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state
a material fact relates to information supplied by the Company or by the Selling
Shareholder or the Managers and the parties' relative intent, knowledge, access
to information and opportunity to correct or prevent such untrue statement or
omission. The amount paid by an indemnified party as a result of the losses,
claims, damages or liabilities referred to in the first sentence of this
subsection (e) shall be deemed to include any legal or other expenses reasonably
incurred by such indemnified party in connection with investigating or defending
any action or claim which is the subject of this subsection (e). No person
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the Act) shall be entitled to contribution from any person who was not guilty of
such fraudulent misrepresentation. The Managers' obligations in this subsection
(e) to contribute are several in proportion to their respective underwriting
obligations and not joint.
(f) The obligations of the Company and the Selling Shareholder under this
Section shall be in addition to any liability which the Company or the Selling
Shareholder may otherwise have and shall extend, upon the same terms and
conditions, to each person, if any, who controls any Manager within the meaning
of the Act; and the obligations of the Managers under this Section shall be in
addition to any liability which the respective Managers may otherwise have and
shall extend, upon the same terms and conditions, to each director of the
Company, to each officer of the Company who has signed a Registration Statement
and to each person, if any, who controls the Company within the meaning of the
Act. Notwithstanding the provisions of this subsection (e), no Manager shall be
required to contribute any amount in excess of the amount by which the total
price at which the Shares underwritten by it and distributed to the public were
offered to the public exceeds the amount of any damages which such Manager has
otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission.
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ANNEX IV
FORM OF LEGAL OPINION FROM US COUNSEL
(i) The Company and each of [LIST OF US SUBSIDIARIES] (the "US
Subsidiaries") has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the jurisdiction of its
incorporation, has full corporate power and authority to own or lease
its properties and conduct its business as described in the
Registration Statement and the Prospectus. All the issued and
outstanding voting stock of the Company and its US Subsidiaries has
been duly authorized and validly issued and is fully paid and
non-assessable. The voting stock of the US subsidiaries is held of
record by and to such counsel's knowledge owned by the Company. To the
best of such counsel's knowledge, except to what is described in the
Registration Statement and the Prospectus, no options, warrants or
other rights to purchase, agreements or other obligations to issue or
other rights to convert any obligations into such shares of voting
stock of the Company or the US Subsidiaries are outstanding.
(ii) The Registration Statement has become effective under the Securities
Act and, to the best of such counsel's knowledge, no stop order
suspending the effectiveness of the Registration Statement or
suspending or preventing the use of the Prospectus is in effect and no
proceedings for that purpose have been instituted or are pending or
contemplated by the Commission.
(iii) The Registration Statement (except as to the financial statements and
schedules and other financial data contained therein, as to which such
counsel need express no opinion) complies as to form in all material
respects with the requirements of the Securities Act and with the rules
and regulations of the Commission thereunder.
(iv) To the best of our knowledge no franchises, contracts, leases,
documents or legal proceedings, pending or threatened, which in the
opinion of such counsel are of a character required to be described in
the Registration Statement or the Prospectus or to be filed as exhibits
to the Registration Statement which are not described and filed as
required.
(v) The issue and sale by the Company of the Shares sold by the Company, as
contemplated by the Underwriting Agreement will not conflict with, or
result in a breach of, any Material Contract or any applicable United
States law or regulation, or so far as is known to such counsel, any
order, writ, injunction or decree, of any jurisdiction, court or
governmental instrumentality.
For the purpose of this opinion, "Material Contract" means all
indentures, mortgages, deeds of trust, loan agreements, bonds,
debentures, note agreements, leases, contracts and other agreements,
instruments and evidences of indebtedness which were filed as exhibits
to the Registration Statement which have been certified to us by the
Company as being all of the indentures, mortgages, deeds of trust, loan
agreements, bonds, debentures, note agreements, leases, contracts and
other agreements, instruments and
20
evidences of indebtedness material to the Company to which the Company
is a party or by which any of their properties or assets are bound.
(vi) No consent, approval, authorization or order of any United States court
or United States governmental agency or body is required for the
consummation of the transactions contemplated in the Underwriting
Agreement except such as have been obtained under the Securities Act
and such as may be required under state securities or blue sky laws in
connection with the purchase and distribution of the Offered Shares by
the Managers.
(vii) The Underwriting Agreement has been duly authorized, executed and
delivered by the Company.
(viii) The Selling Shareholder is the owner of record of the Shareholder
Offered Shares and has full legal right and authority to sell, transfer
and deliver in the manner provided in the Underwriting Agreement the
Shareholder Offered Shares. Upon delivery on behalf of the Selling
Stockholder to the Underwriters of certificates for the Shareholder
Offered Shares against payment therefor as provided in the Underwriting
Agreement, the Underwriters will acquire all the rights of the Selling
Stockholder to the Shareholder Offered Shares and will acquire the
Shareholder Offered Shares free and clear of any "adverse claim" (as
such term is used in Section 8201 of the Uniform Commercial Code as in
effect in the State of California), assuming the Underwriters acquire
the Shareholder Offered Shares in good faith and without notice of any
such "adverse claim".
(ix) The Company has full legal right and authority to enter into the
Underwriting Agreement and to sell, transfer and deliver in the manner
provided in the Underwriting Agreement the Shares sold by it
thereunder.
We hereby advise you that we have participated in the preparation of the
Registration Statement and the Prospectus, including participants in conferences
with officers and representatives of the Company and with its independent public
accountants, and with the Managers' counsel, at which conferences the contents
of the Registration Statement and the Prospectus and related matters were
discussed, and while we have not independently verified the accuracy or
completeness of the statements contained in the Registration Statement or the
Prospectus except as necessary to render the opinions provided above and we have
not made any investigation or analysis with respect to the financial statements
or other financial information included in the Registration Statement or the
Prospectus, no facts have come to our attention which would give us reason to
believe that the Registration Statement, at the time the Registration Statement
became effective, contained any untrue statement of a material fact or omitted
to state any material fact required to be stated therein or necessary to make
the statements therein not misleading or that the Prospectus, at the time the
Registration Statement became effective and at the date hereof, contained an
untrue statement of a material fact or omitted to state a material fact
necessary in order to make the statements therein, in light of the circumstances
under which they were made, not misleading.
As to various questions of fact material to our opinion, we have relied, without
independent investigation or verification, upon the statements, representations
and warranties of the various parties contained in the above-listed documents,
which we
21
have assumed to be true and accurate, and upon statements of officers of the
Company contained in certificates (the "Officers' Certificates") delivered to us
by the Company, which we believe to be correct and copies of which are attached.
22